Review from last class
1. Organization theory is a different way of
thinking about organizations.
2. In BA 152, we examine organization-level
issues and the organization’s environment.
3. We will rely on the rational-contingency
perspective.
4. But appreciate that the underlying paradigm
is likely changing.
5. Questions?
Strategy and
Organizational Design
BA 152
Organization Strategy, Design,
and Effectiveness
External Environment
Opportunities
Threats
Uncertainty
Resource Availability
Organization
Design
Strategic
Management
CEO, Top
Management
Team
Internal Environment
Strengths
Weaknesses
Distinctive competence
Leadership Style
Past Performance
Define
mission,
official
goals
Select
operational
goals and
strategies
Structural Form –
learning vs.
efficiency
Information and
control systems
Production
technology
Human resource
policies,
incentives
Organizational
culture
Interorganizational
linkages
Effectiveness
Outcomes
Resources
Efficiency
Goal attainment
Stakeholders
Competing values
Balanced Scorecard
Organization Strategy, Design,
and Effectiveness
Strategic
Management
Define
mission,
official
goals
Select
operational
goals and
strategies
Organizational Goals
• Mission – the organization’s reason for
being
– Wal-Mart: "To give ordinary folk the chance to
buy the same thing as rich people"
– Mary Kay Cosmetics: "To give unlimited
opportunity to women"
– 3M: "To solve unsolved problems
innovatively"
– Merck: "To preserve and improve human life”
– Walt Disney: "To make people happy"
Organizational Goals
• Official Goals - formal statement of that
reason (usually found in Annual Report)
Organizational Goals
• Operative Goals – what is actually
sought
– Overall Performance
– Productivity
– Resource Acquisition and Management
– Market Share
– Employee Development
– Innovation and Learning
Examples of Official Goals
• Bertelsmann
– Trim debt
– Achieve EBITA return of 10% in all divisions
ahead of 2005 IPO
– Return authority to division heads
– Refocus on core businesses (television,
magazines, books, book clubs, music)
– Sell specialty publisher & e-commerce unit
– Expand U. S. music and magazine holdings
and European television arm
Organizational Goals
• Purpose of Goals
– Provide legitimacy (both internal & external)
– Give direction and motivation to employees
– Provide decision guidelines
– Serve as criteria for determining how well
the organization is doing
What Determines an
Organization’s Goals?
• Nature of the environment and culture (or
is it vice-versa?)
• Environmental opportunities and threats
• Organizational strengths and weaknesses
• Top management choices
Organizational Goals
•
•
•
•
What is the KFBS mission?
What are our official goals?
What are our operative goals?
How do we go about attempting to achieve
these goals?
Organizational Strategies
• What is a strategy?
– “A plan for interacting with the competitive
environment to achieve organizational goals.”
(Daft)
Strategies in the Video Game
Industry?
• Microsoft – Using a PC-Centric strategy
with its X-Box.
• Sony – Creating an around-the-clock
entertainment portal with PlayStation 2
• Nintendo – Focusing on gameappliance strategy with GameCube
Organizational Strategies
• What is a strategy?
– “A plan for interacting with the competitive
environment to achieve organizational goals.”
(Daft)
• Michael Porter’s Approach to Strategy
Porter’s Competitive Strategies
Competitive Advantage
Low Cost
Uniqueness
Broad
Low-cost
leadership
Differentiation
Focused
Low-cost
leadership
Focused
differentiation
Competitive
Scope
Narrow
Porter’s Competitive Strategies
Competitive Advantage
Low Cost
Uniqueness
Broad
Competitive
Scope
Narrow
Organizational Strategies
• What is KFBS’ strategy?
– Low-cost leadership?
– Differentiation?
– Focused, low-cost leadership?
– Focused, differentiation?
– Some combination?
Organizational Strategies
• Can/should you try to do more than one?
– Why or why not?
• How do you know if your strategy is
working?
Next Time
Organizational
Effectiveness